Agricultural Technology Commercialization:
Stakeholders, Business Models and Abiotic Stressors
Stephen Suffian, Arianna De Reus, Curtis Eckard, Amy Copley, Khanjan Mehta
Humanitarian Engineering and Social Entrepreneurship (HESE) Program
The Pennsylvania State University
Abstract
A wide range of innovative and affordable technologies have emerged to facilitate the creation,
expansion, and streamlining of Food Value Chains (FVCs) in developing countries. These
technologies target various value chain activities including agricultural production, processing,
storage, marketing, distribution, and consumption. Low-cost greenhouses, solar food dryers,
threshers, grinders, storage containers, and packaging equipment are examples of technologies
that have the potential to improve the livelihoods of millions of smallholder farmers and
agricultural workers while making FVCs more efficient and bolstering food security. Successful
commercialization of these technologies will require entrepreneurs to develop sound business
strategies that will disseminate and sustain these products in the marketplace. At the same time,
entrepreneurs need to demonstrate to potential customers how they can afford, maintain, and
profit from the technology product. This article presents a typology of systemic multistakeholder business models to assist technology entrepreneurs in commercializing and
integrating their agricultural technologies into FVCs. For each of these business models, the
impact of diverse abiotic stressors like access to capital, supply chain resiliency, trust issues, and
ownership dynamics are discussed. Collectively, these business models and analyses of stressors
are meant to help entrepreneurs develop strategies for their own agricultural technology ventures.
Introduction
Growth in the world population has increased demand for food and threatened global
food security, which is characterized by the accessibility, usability, and availability of food. An
array of other factors, including the worldwide expansion and changing dietary preferences of
the middle class, urbanization, diminishing natural resources, food price volatility, and
inefficient labor and land use have exacerbated the problem (World Health Organization, 2012).
Despite these challenges, the Food and Agriculture Organization (FAO) of the United Nations
ascertains that our planet has the capacity to sustain the expanding population. This requires the
optimization of land use productivity in terms of labor, crop yield, water conservation, and waste
reduction (OECD-FAO, 2011).
Global food security needs are currently being addressed through agricultural policies
that focus on promoting more sustainable farming practices, reducing food waste and losses —
one of the foremost impediments to food security — and fostering greater commercial and
technical innovation in agricultural systems. Approximately one-third of the world’s food
produced for human consumption (1.3 billion tons) is wasted by consumers or lost along the
supply chain each year (Gustavsson, Sonesson, Cederberg, Otterdijk, & Meybeck, 2011). In
developing countries, nearly 40% of food losses occur after harvest and are caused by premature
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harvesting, unsafe handling and processing, a lack of processing capabilities, or poor storage
facilities (Ibid). Sub-Saharan Africa alone suffers from almost $4 billion of post-harvest grain
losses every year. If effective processing and storage technologies could be utilized to prevent
these losses, the saved food would have the potential to feed 48 million people (World Bank,
2011).
Improving land use productivity and reducing food waste can be accelerated by the
adoption and use of agricultural technologies that improve the processes comprising Food Value
Chains (FVCs). These processes can be divided into the following phases: agricultural
production, processing, storage, marketing, distribution, and consumption. There are 3.7 billion
people in the world today that earn US $8 a day or less, 70% of who depend on agricultural
activities for their livelihoods (World Economic Forum, 2009). Successfully tapping into the
smallholder market with affordable technologies fosters the growth and sustainability of FVCs.
Numerous businesses, non-profit organizations, and academic programs have emerged to
develop innovative technologies that both improve the livelihoods of farmers and promote food
security. Yet these entities face enormous obstacles as they attempt to put their products in the
hands of people who need them most (Contractor & Lorange, 2002). These challenges can be
financial, socio-cultural, environmental, or political in nature. They manifest in different forms
depending on the geographic and cultural context of the customer base. One way to overcome
these challenges is for technology entrepreneurs to develop, pilot, and refine business models
until they identify a series of successful strategies for commercialization that are resilient,
sustainable, and scalable in particular regions and nations.
A typology of business models for the commercialization of agricultural products and
services can help entrepreneurs identify potential partners, develop business strategies, and
consider different methods of market insertion and growth (Copley, Eckard, DeReus, & Mehta,
2013). In this article, the viability of each model is assessed based on its resilience in a FVC.
Before an entrepreneur chooses a business model, he or she must conduct the due diligence to
determine which model is most likely to succeed. Each of the models discussed in this paper is
uniquely suited to accommodate different stressors within a FVC. Stressors are defined as
elements of pressure that act upon a FVC, either reinforcing or mitigating value along the chain.
Some examples include socio-economic issues, stakeholder relationships, and environmental
impacts. Evaluating these models relative to strengths, weaknesses, opportunities, and threats in
response to a series of stressors will inform the entrepreneur’s decision making process and
devise sustainable business models that strengthen FVCs and improve livelihoods.
Food Value Chain Technologies
Figure 1. Simplified Food Value Chain with Examples of Relevant Technologies
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Agricultural Production
There are many technologies that can improve the timing, quality, and yield of
agricultural goods including greenhouses, drip irrigation systems, treadle pumps, sand dams, and
rainwater harvesting systems. For example, low-cost greenhouses allow farmers to control the
temperature, light, and harvest cycle of plants and enable them to grow crops year-round (Pack
& Mehta, 2012). When paired with drip irrigation systems, greenhouses can reduce farmers’
water consumption by more than 30% (Shock, 2006). Treadle pumps, rainwater harvesting
systems, and sand dams also assist in securing water for crop cultivation. This is particularly
important in semi-arid and arid climates where food scarcity is especially acute and a successful
crop depends on economizing water. Rainwater harvesting systems (RHSs) and sand dams also
assist in securing more water for crop cultivation. While RHSs collect water from roofs, roads,
and temporary water sources to store for future use, sand dams collect water by extracting it from
dams built across seasonal river beds (Excellent Development, 2012). All of these technologies
help farmers optimize their production to meet consumer demand for agricultural products.
Processing
Processing occurs when raw agricultural materials are altered into new, more valuable
states (International Assessment of Agricultural Knowledge, 2009). Post-harvest processing
technologies reduce the risk of food spoilage by extending the shelf life of products. Applying
heat, replacing natural raw ingredients of food, and using aseptic packaging are all methods of
increasing shelf stability. This increase in value allows farmers to extract higher rates from their
customers (World Bank, 2011).
Solar dryers, grain mills, pedal threshers, small-scale rice drying, tarpaulins, and solar
heaters are all examples of processing technologies. Solar dryers are a fast, safe way to trap heat
from the sun and evaporate the water inside of food (Gregoire, 1984). Tarpaulins made of
polyester or polyethylene are used to dry maize and other goods on the ground or hanging from a
rope (Nandudu, 2011). Solar heaters for grain made from plastic or corrugated galvanized iron
are held down to the ground with rocks, allowing their hot micro-climate to reduce moisture; this
process mitigates both mold growth and insect infestation (World Bank, 2011). Processing can
increase shelf life, reduce post-harvest waste, improve nutrition density, increase fiber and
phenol antioxidant content, and reduce the volume and weight of the food (Vinson, Zubik, Bose,
Samman, & Proch, 2005).
Storage
Storage of agricultural products is essential after processing. Technologies that enhance
food storage protect food from pests and moisture and provide a means of safe preservation for
long periods of time. Insect pests and grain pathogens are responsible for ruining 20-30% of
grain if kept in traditional storage granaries made from dung, sticks, or mud (Tafera, et al.,
2011). These technologies include hermetically sealed bags, super bags, plastic drums, and metal
silos, among other technologies. For smaller storage solutions, hermetically sealed bags are
triple-layered to protect against insects. Larger super bags made of polythene material act as
liners inside of traditional woven grain storage bags (World Bank, 2011). Super bags can be
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designed to hold up to three tons of grain with a gas barrier that restricts oxygen and water vapor
from entering. Plastic drums can also be used as granaries. These storage methods significantly
improve grain shelf life by providing protection from pests and moisture (Ibid). Metal silos can
also help farmers protect their grains from pests and reduce post-harvest waste as well as provide
local employment opportunities, since they can be constructed by artisans using locally available
materials and well-known construction methods.
Marketing
Food marketing is the process that connects agricultural goods to consumers. It
encompasses a variety of tasks integral to successful FVCs, such as making investment
decisions, utilizing institutions, managing resource flows, and engaging in physical and business
activities (Jaffee & Gordon, 1993). Technologies that enhance food availability and consumer
education serve to improve logistics for farmers, vendors, and consumers, leading to more
efficient FVCs. Marketing technologies must provide suppliers with information to help them
market their goods more strategically. The use of mobile technology has immense potential to
provide educational opportunities in rural regions of underdeveloped countries. For example, cell
phones have been used to provide real-time conditions regarding weather, soil, pests, and
diseases for smallholder farmers in rural India (Patel, Chittamuru, Jain, Dave, & Parikh, 2010).
In Kenya, the Kenya Agricultural Commodities Exchange (KACE) provides farmers with market
price information to help them decide where and when to sell their crops. KACE provides this
information via radio, phone, and resource center, helping to minimize transaction costs between
all agricultural stakeholders (Mukhebi, et al., 2007).
Distribution
Distribution in FVCs consists of physically getting agricultural products to the consumer.
Technologies that aid this process can reduce food waste and facilitate transport, providing
increased access to agricultural products for consumers. For example, cold chains are the ways in
which temperature-sensitive food gets from the producer to the consumer so that it does not
perish in the process (Rodrigue, Comtois, & Slack, 2006). There are various technologies that
keep food refrigerated such as gel packs, dry ice, quilts, reefers, and eutectic plates. Reefers are
refrigerated shipping containers used to carry food between countries (Ibid). Other methods of
preventing food waste during transportation are wax coatings on produce, polyethylene packing,
and applying gum arabic to fruits to prevent oxygen and carbon dioxide from causing it to age.
The coating is edible, water soluble, eco-friendly, and can be made from acacia trees (Ali,
Maqbool, Ramachandran, & Alderson, 2010).
Distribution strategies that support local sourcing of produce can drastically reduce
reliance on imports, allowing communities to save money and boost local agro-businesses
(World Economic Forum, 2009). Further, when companies partner to distribute bundles of
products from many different suppliers, distribution costs are minimized. Cereal banks are local
community warehouses where farmers bring their grain immediately after harvest and are paid
for their contributions. Then when grain is scarce in the community, it is sold from the
warehouse at below-market prices (World Bank, 2011). This shortens the distance that people
have to travel to purchase grains, and makes grains affordable when external prices are high.
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Consumption
Consumers have a direct influence on supply and demand in a market, which affects the
actions of other key players in the FVC, even though they do not directly partake in the FVC
processes (Hawkes & Ruel, 2011). Certain technologies and marketing strategies have been
created to assist in more nutritious and healthy food consumption (World Economic Forum,
2009). Solar cookers, fireless cookers, ceramic stoves, and biogas digesters are technologies that
provide the consumer with a safer cooking environment while decreasing fuel costs. Solar
cookers are stoves designed to trap heat from the sun with reflectors using metal sheets (Cuce &
Cuce, 2013). They enable people to cook without wood or charcoal, saving forests from logging
and providing safety to women who have to walk long distances to find firewood for cooking.
Fireless cookers are low-cost devices that are used as a secondary form of cooking. They can be
used for food preparation or to keep food warm for extended periods of time, with the potential
to reduce waste and alleviate smoke (Okello, 2009). Ceramic Jiko stoves are another technology
that aid in food consumption. These stoves are portable, more eco-friendly than open-fire
cooking, and can reduce fuel expenditures for a family by 18% over a 5-year period (Vaccari,
Vitali, & Mazzù, 2012). Farmers who have significant amounts of animal waste can utilize
anaerobic digestion to produce natural gas for cooking. Low-cost biogas digesters eliminate the
need for charcoal, leading to a substantial reduction in environmental and health impacts from
cooking (Mehta & Mehta, 2011).
Challenges to Technology Commercialization
Even though a variety of technologies have been developed to improve each phase of a
FVC, many of these technologies have failed to reach the target customer segments. Traditional
dissemination methods such as donating technologies to developing countries have not been
consistently successful since donors often overlook how the technology will fit into the specific
social, political, geographic, economic, and cultural context of its users (Polak, 2008). If the
technology’s design is inappropriate for the context and the product fails to create value for the
user, the user will not continue to utilize or promote the product within his or her social network,
especially when the user feels no sense of ownership over the donated product. Additionally, the
user will not invest adequate time, labor, or money in maintaining the product and it will
ultimately be abandoned (Conley & Udry, 2003)
Commercialization has proven to be a more successful method for technology
dissemination because of the sense of ownership that stakeholders have in the technologies they
purchase (Polak, 2008) (USAID, 2011). If the user identifies a clear business model for
generating profit from the outset and the technology yields successful results, the user will want
to capitalize on its economic value and continue operating and maintaining the technology.
Nonetheless, commercialization still has its own unique challenges that can impede and disrupt
nascent technology ventures. Many ventures do not wish to invest the time and capital into
designing, researching, validating, and manufacturing products to meet consumer demand in a
developing country context (London & Hart, 2004). These ventures may also doubt whether their
standard business models will be profitable in an environment where uncertain economic
conditions, weak governance, and poor infrastructure pose significant risk to fledgling businesses
(World Economic Forum, 2009) (USAID, 2011).
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Several stressors along the FVC can impact the success of commercializing technologies.
It is vital to address these stressors when developing a business strategy, as most occur outside of
the realm of the manufacturing facility. For instance, poor economic circumstances in rural areas
lower the profit that a farmer can receive from value addition. Agro-ecological heterogeneity
also may require regional design changes for certain products (Jack, 2011). Implementation of a
disruptive technology could be met with cultural resistance that can best be addressed with
localized manufacturing, partnerships with community groups, and sufficient marketing. For
example, fireless cookers that were introduced to western Kenyans were met with resistance due
to the high cost of their insulating material and poor contextual marketing. When a workshop
was conducted where women were able to bring their own designs and use local staple foods for
demonstration purposes, the stigma against this product was greatly reduced (Okello, 2009). In
essence, product design, implementation strategy development and steady-state business strategy
development must be undertaken in a concurrent and integrated fashion.
Business Models for Technology Commercialization
Typically, an entrepreneur will enter a new market by manufacturing a product and
selling it at a higher cost to reap a profit. During this process, he will efficiently and effectively
manage cash flow, engage in marketing activities and provide after-sales support and
maintenance. This process is fairly linear for low-cost products that can be easily purchased and
owned by individuals or businesses. The entrepreneur will develop a business model for this
enterprise to function effectively and profitably. However, several of the technologies discussed
in this paper are too expensive for smallholders to buy outright in an independent fashion. For
example, a solar dryer manufacturer hoping to expand sales to rural areas will find difficulty
reaching customers who can afford to purchase their product without a financing plan. For the
technology to reach the intended customers, a second-level business strategy must be developed.
This model must, from the customer’s perspective, explicitly delineate how they will buy, profit
from, and sustain the product. It must also explain how capital costs will be recovered, and how
profits or losses will be shared amongst partners. The two-level business model
conceptualization addresses this need for detailed business models of collective ownership
(Mehta & Mehta, 2011). Collective ownership models might be employed for the entire lifecycle
of the product or only initially, as one individual may acquire all equity over time. The secondlevel business model may also address other stressors that impact the success of
commercialization, such as providing capital, supply chain consistency, or finding new markets
and sales channels.
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Figure 2. Two-Level Business Plan
The two-level business plan is founded on the premise that equity from and between all
stakeholders in a venture will yield the most successful results (Ibid). It prevents social tensions
from arising and affecting the use of the product, while promoting pride and ownership over the
product and increasing the likelihood of its maintenance. If the entrepreneur cannot propose a
practical Level Two business plan, he might not be successful in engaging his customers and
increasing his sales and profits. For example, An entrepreneur who develops an innovative solar
dryer and wishes to enter a new market must first establish local manufacturing operations or
establish a partnership for manufacturing, assembling, or importing the product. The
entrepreneur (and manufacturer) will develop a business model that delineates how the product
would be manufactured, distributed and sold, how revenues would be utilized, how costs would
be minimized, and how customer relations would be maintained from awareness to after-sales
support services. These activities would constitute the Level One business plan for the venture.
Osterwalder and Pigneur’s Business Model Canvas provides a compelling framework for
developing this business model.
Next the manufacturer would consult with diverse entities to determine how the solar
food dryers could reach their target customers. The customers might lack access to capital to
purchase the solar dryers, lack market linkages for dried food products, or have difficulties
sourcing high-quality produce for drying. The manufacturer must develop and validate business
models that demonstrate how diverse entities can collaborate to reap benefits from the solar
dryer. These business models must be developed from the customer’s perspective with clearly
articulated flows of money, value and agricultural products – raw and processed. For example,
one model could involve marketing agencies purchasing large numbers of solar dryers and
leasing them to farmers in rural areas to dry their produce on site. Another model might revolve
around financing agencies providing low-interest loans to farmers to purchase solar food dryers
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with a marketing agency partnership guaranteeing the purchase of processed (dried) food
products. A third model might involve a farmer’s cooperative purchasing several solar dryers and
renting them to members at a low-cost. The manufacturer must analyze these different multistakeholder models in the backdrop of the contextual realities. These customer-centric concept of
operations are referred to as the Level Two business models.
Level Two business models are extremely varied because they depend on the unique
characteristics of the manufacturer’s product as well as the established modes of generating
revenues and providing services. The manufacturer can choose to establish business relationships
with a wide array of actors including agro-enterprises, community centers, cooperatives,
marketing agencies, micro-loan institutions, local governments, NGOs, informal lending
systems. Typically one institution will act as the lead risk taker with others playing supporting
roles in the value chain. Each of these partners has its own specific motivations and desired
outcomes for its engagement in the venture. These motivations and expectations must be clearly
articulated and validated to make the venture successful. If the manufacturer is not able to
demonstrate how these multi-stakeholder systems would work, the business venture is unlikely
to be successful.
The manufacturer must consider the impact of relevant abiotic stressors on the business
model. An example provided by many farmers in Kenya is the Amiran Farmer’s kit. This kit
includes the installation, training, and continued agro-technical support for an 8’ x 15’
greenhouse. By providing training and extended support, Amiran alleviates several stressors
related to the farmer’s ability to maintain and optimize a product. Amiran has partnered with the
Kenyan government to showcase these kits at farm shows and vocational institutions to boost
marketing and enhance reputation of its product. However, this kit is cost prohibitive to
smallholder farmers with limited income. Amiran does not directly provide any method of
financing, which has limited their customer base. However, they have developed partnerships
with financing agencies to facilitate access to capital.
A manufacturer should consider how customers will access capital in order to broaden its
potential market share. The strategy of the manufacturer must also be dependent upon the
characteristics of each individual product. More mobile products can be shared or rented.
Complex products may require customer training or a separate entity to operate. Supply chain
resiliency is another stressor that greatly affects the commercialization of a technology. Seasonal
goods must be treated differently than those that grow year-round. Weather can greatly disrupt
road conditions and halt less developed supply chains. The regional availability of the valueadded market is also important to consider. These value-added goods may even need to be sold
in entirely different markets from the original goods, potentially by leveraging export markets.
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Table 1. Commercialization Stressors by Stakeholder
This paper presents a typology of Level Two business models that would enable the
integration of agricultural technologies into FVCs. A case study of how each business model
could apply to a hypothetical solar dryer manufacturing enterprise is discussed. We describe how
certain abiotic stressors impact the viability of the business models and implicate the
manufacturer, customers, end-users and other supporting entities. This typology will help inform
entrepreneurs on possible strategies for creating economically sustainable and socially equitable
technology-based ventures in developing countries. The overarching goal is to develop win-win
propositions for all stakeholders connected to FVCs in a manner that optimizes the FVC and
makes it more sustainable and equitable.
Data regarding these stressors was refined over three years of developing and
commercializing various agricultural technologies in East Africa. From May through July 2012,
primary data was collected from detailed interviews with over 100 stakeholders (including
farmers, vendors, and traders) from various regions of Kenya. Their concerns regarding a FVC
were organized using STEEP (Social-Technical-Economic-Environmental-Political) criteria. A
model was constructed of the FVC with feedback loops utilizing a systems thinking approach in
order to better understand the relationship between the listed concerns and how they impact each
stakeholder (Meadows, 2008). This system was then evaluated for each Level 2 business model,
where commercialization stressors were identified.
A Guide to the Typology
The following typology is comprised of business models that demonstrate how a
manufacturer can best collaborate with different actors to install, sustain, and scale a technologybased venture. The typology proposes a series of strategies designed to maximize the success of
a venture and then classifies these strategies based on the most prominent actors in the model.
This serves to provide some clarity and structure to the vast number of diverse strategies that can
be employed to commercialize agricultural technologies. These models can be combined in
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various ways to yield richer and more equitable multi-stakeholder models. As a reference, the
manufacturer is the originator of the technology and is the entity trying to develop Level Two
models that can be sustained by the marketplace. The manufacturer seeks customers to purchase
its products, and then must work with these customers to find consumers who are the ultimate
users of the products. While the business models generically refer to the end-user of the
technology as a “farmer,” the end-user could be engaged in any other role – value addition,
distribution, storage, depending on the nature of the technology product in question.
In other words, let us assume that a company comes across an innovative solar food dryer
technology. This technology may have been licensed by a larger organization, developed by an
educational institution, imported from a different market, or designed and manufactured
internally. This company is now the manufacturer trying to develop different Level Two business
strategies for the various stakeholders to convey the potential of their solar food dryers. This
typology is a reference for the solar food dryer company in its quest to enter the marketplace or
expand their share. These scenarios are not supposed to be replicated by manufacturers since
every operating context is diverse and necessitates an independent and comprehensive analysis.
At the same time, the scenarios provide a pliable medium for the manufacturer to bring back
diverse considerations into his own venture. To further explain what types of entities are
involved in these models, this section will briefly define the actors included in the business
models and describe their motivations and goals for developing a technology enterprise.
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Table 2. Stakeholder Analysis.
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Table 3.Other Potential Stakeholders.
1. Agricultural Venture Model
Figure 3. Agricultural Venture Model Diagram



The manufacturer sells the product(s) to the agricultural venture.
The agricultural venture uses the product(s) in its business operations that relate to the FVC.
The agricultural venture typically buys goods from farmers, adds value and sells it in the
market place.
 This model requires an agricultural venture with enough capital to purchase the product(s)
and directly market its processed foods.
Example: An agricultural venture purchases 50 solar dryers from the manufacturer. It also
purchases vehicles to transport raw goods from farms to the company’s factory/warehouse and
ultimately to the market. Once it contracts enough suppliers of fresh produce, it begins drying the
goods to sell in the market. As it refines its business operations, it can scale up by contracting
more suppliers and purchasing more solar dryers from the manufacturer. The agricultural venture
has its own (easy access to) capital and the manufacturer does not need to pro-actively work with
the manufacturer to make the Level Two Business Model work.
Access to Capital: This is the most basic model of technology commercialization because it
involves the manufacturer selling a product outright to an agricultural venture that will then use
the product in its operations. In contrast to the rest of the models, this model is focused on
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ventures that have the capital outlay to directly invest in the manufacturer’s technology. Since
agricultural ventures usually engage in processing-related activities, they might also purchase
goods from local farmers and then sell it in the market place. The agricultural venture therefore
manages quality control, marketing, shipping of goods, etc. The agricultural venture is constantly
looking for goods so that it can process and sell them. Therefore, it might be inclined to
incentivize farmers to supply year-round. This model works well with products that require high
capital costs but have large profit margins compared to the raw goods. For example, mango juice
is significantly more profitable than mangos sold on the open market. However, the capital costs
of industrial juice-making machinery are high and quality control is a must. A cold chain might
be necessary and hence a centralized manufacturing facility would be most appropriate. An
independent venture with sound financial backing would be able to alleviate several stressors
while creating value for the mango farmers as well. It is fairly common to find such high-capital
organizations to be completely or partially owned by the government.
Supply Chain Resiliency of Goods: This model is also suitable for products that add value by
improving distribution networks. Transporters can struggle with heavy rains, leaving them
trapped at a farm for long periods of time, delaying their shipments and causing significant
losses. For example, mangoes have a very short shelf-life and mango juice requires cold-storage
transport. A stronger supply chain network organized by an independent entity could utilize bulk
transportation, supply chain management, and dedicated marketing to decrease price volatility
due to road conditions and increase access to optimal suppliers.
Product Characteristics (Complexity): This model is a good choice for products that may be
too complex for individual stakeholders to operate without significant training. The agricultural
venture would be able to afford dedicated and trained staff for maintenance of the product,
reducing the need for the manufacturer to train individual users. An example might be a largesize sunflower-seed oil electrical generator, which is a complex device that involves significant
maintenance. An agricultural venture would have the capital and on-site support to ensure that
this electrical generator is functional at all times.
2. Informal Group Model
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Figure 4. Informal Group Model Diagram


The manufacturer sells the product(s) to an informal group of farmers.
Farmers share the product(s) equitably based on the amount of capital they have invested in
the product(s).
 One individual in the group will be in charge of routine maintenance. Others will compensate
for that labor by giving the individual additional use of the product. This job can rotate
among the group so that every farmer has the opportunity to fulfill this role.
 Farmers can use the product(s) to complete their FVC activities and earn profits.
Example: Four farmers who have lived in the same community for years decide to collectively
purchase a single solar dryer. They equally share the initial cost of the solar dryer and take turns
using it throughout the harvest seasons. Although these farmers were willing to invest in a solar
dryer together, they find it difficult to share the dryer during certain seasons of the year when
many crops are harvested and need to be dried at the same time. They also have trouble deciding
who will fix the solar dryer when it breaks, especially if multiple parties are to blame for the
damage. The lack of an effective coordination and maintenance plan for the solar dryer leads to
social tension within the group. With the additional revenue generated from the solar dryer, the
farmers might consider purchasing more solar dryers to facilitate sharing and prevent strains on
their relationships.
Collective Ownership/Product Characteristics (Mobility, Complexity): In areas where
different stakeholders live and work very closely to one another, it is natural for groups to selforganize in support of one another and their ventures. They will often share best practices,
market information and even tools or machinery to facilitate their work. A farming tool, like a
scythe or new plough technology, would be much easier to share than an infrastructure product
like a greenhouse or drip irrigation system. The geographical distance between partners at the
agricultural production phase may make sharing difficult, especially under adverse weather
conditions or high-demand periods.
Trust and Social Capital: When these groups are created, they there are typically no legal
entities or contracts that dictate how they must cooperate with one another. An operating
structure evolves from the social dynamic of the group to promote mutual gain for all members.
At the same time, the fact that no legal agreement binds the group together enables a member to
take advantage of the group with no legal repercussions. It is very important that members trust
one another before they start an informal joint venture. This model would be well-suited for
products related to distribution as long as transporters operate in the same markets. This would
allow them to frequently interact with each other to make collective decisions regarding
maintenance and sharing details. For example, transporters can take turns using reefers, a coldstorage technology, to transport quickly perishable goods (Rodrigue, Comtois, & Slack, 2006).
When they return to the market they will be accountable to the other members of their group.
Problems could arise since these partners are direct competitors. The trust between members
must contend with their competitive nature. This is an important note for the manufacturer, as
social issues that arise from the implementation of a product have the potential to create a
permanent negative stigma. For example, interviews with over 100 consumers have indicated an
overwhelmingly negative attitude towards greenhouse tomatoes, with claims that they have
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significantly reduced quality and short shelf lives. These characteristics are applicable only to
one of the earlier seed varieties used in greenhouses. While new varieties are being used that
alleviate these concerns, the stigma associated with these tomatoes will be much more difficult to
remove.
A manufacturer may have an easier time marketing a product to a small informal group of
retailers. Retailers typically have strong relationships with each other, are often in the same
location, and sell similar products. This would allow them to share a value-added storage product
with ease. Interviews with over 60 retailers in several markets in Kenya have shown that wastage
at the market is the most important factor in turning a profit. This waste can be caused by a lack
of demand, volatile prices, or produce quality. A manufacturer selling low-cost storage units
could seek out a small group of produce retailers who would be willing to pool resources to
purchase the product. Since they work in close proximity and typically have strong social
relationships, they would be more easily able to share until their increased profits allow them to
purchase individual units. This low-cost, easy to share solution would allow the manufacturer to
access a dense and socially-connected client base. Product success among a small group of
retailers could very quickly lead to utilization by entire markets.
Value-Added Market Availability: Despite an informal group’s interest in purchasing
agricultural technologies, a manufacturer would find it more difficult marketing their product to
this audience as opposed to a more structured organization. Informal groups will likely begin
using a product as a result of successful branding and word-of-mouth marketing, requiring the
benefits of the product to be well-known and sufficiently advertised. This model will work best if
the primary innovation of the product is cost-savings of a previously successful product,
allowing smaller stakeholders access to a market they previously couldn’t afford to participate in.
This model would also be suitable for virtual products that may relate more to marketing than
physical changes to the product. An example would be a smartphone application that provides
agricultural information and real-time pricing to farmers and helps them increase profits. The
web developer could sell this application on a per-phone basis. As farmers begin to rely on this
information, they will be more inclined to purchase personal access to garner competitive
advantage by having this information always available.
3. Co-operative Model
15
Figure 5. Co-operative Model Diagram
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The manufacturer sells the product(s) to the co-operative.
Farmers rent the product(s) for a certain number of days. The co-operative charges its
members a low rental fee to use the product(s), whereas it charges non-members a higher
rental fee.
 The co-operative pays for routine maintenance on the product(s) out of its own budget.
Farmers are charged a penalty for damage due to negligence.
 The farmers are solely responsible for all profits and losses associated with their use of the
product(s).
Example: Farmers affiliated with a co-operative grow tomatoes for the local market. The cooperative purchases 50 solar dryers from the manufacturer. Since the co-operative purchased a
bulk order of solar dryers, it was given a ten percent discount off their total cost. The farmers
then use the co-operative’s dryers to dry tomatoes for personal consumption or sale at the local
market. Farmers that are part of the co-operative can rent and use these solar dyers at a
discounted rate (or for free) while other farmers who are not part of the co-operative may use the
solar dryers at a higher price. These rental fees supplement the co-operative’s membership dues,
providing it with funds to maintain the current solar dryers, invest in future solar dryers, or
purchase new technologies that complement the solar dryers.
Collective Ownership: Similar to the informal lending model, the co-operative model shows
how a group can work together to collectively own and manage a product. Yet those in the cooperative differ from the informal group because the members of the co-operative work within
an official framework that ensures equitable asset-sharing. Unlike the Informal Group Model,
which evolved from social ties, the co-operative is equipped with formal mechanisms that
prevent members from monopolizing or abusing group assets. So while members of an informal
group might be able to borrow an asset for longer than they have requested at no additional cost,
members in a co-operative will have to adhere to the co-operative’s rules if they wish to reap its
collective benefits. While rules are formalized, the relationships between members are much less
developed than in the Informal Group Model, which could intensify social dynamic issues. This
could manifest if the product has limited time spans of profitability. For example, a solar dryer
for tomatoes may only be profitable for a few months each year. Tensions are more likely to
arise when sharing the dryer if the members are not socially accountable, as they would be in the
Informal Group Model.
Trust and Social Capital: The formation of the co-operative provides a formal organization that
has potential for marketing value-addition. These co-operatives are able to build trust with
consumers that could allow them to streamline their supply chain and build a more resilient
network (Mehta, Maretzki, & Semali, 2011). Products don’t need to be mobile, since they will
typically stay in one location that all members can access. An example of this business model is
a tea co-operative that shares drying and grinding machinery between tea growers. The
machinery remains at a central location, with the growers bringing their tea to be processed. In
this scenario, members typically also use the co-operative to market as a single entity. In
products that are shared but not mobile, it is imperative that an individual is designated to take
primary care of the product. A greenhouse, for example, requires daily maintenance. A single
day of neglect could lead to destructive pest infestations. Issues may arise if the caretaker is not
16
properly chosen or must relinquish duties.
Access to Capital: Since co-operatives have more structure and a larger number of members,
they have more capital for purchasing existing products and investing in new products. The
manufacturer would benefit from keeping a close business relationship with similar cooperatives. Also, if these co-operatives have confidence in the manufacturer’s products they
would be likely to invest in any new lines of technologies the manufacturer would bring to
market.
Supply Chain Resiliency of Goods: While the larger, formalized nature of this model allows for
greater leveraging of resources for marketing and sharing, co-operatives must adhere to certain
structures and have group consensus on new ventures. As a result, working with this entity from
the manufacturer’s perspective can be slow and painstaking. Delays also have the potential to
affect the use of the product, complicating sales in volatile markets. A grain storage facility, for
example, may be more difficult to access than with a more informal model. This risks impacting
the speed and reliability of the value chain, especially in response to sudden events such as
weather conditions or changes in government regulation. The manufacturer should assess the
probability of this risk based on the characteristics of its product before proceeding with this
model.
4. Rental Agency Model
Figure 6. Rental Agency Model Diagram
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The manufacturer sells the product(s) to the rental agency.
The rental agency rents the product(s) to customers who pay to take the product(s) to their
properties for a pre-determined length of time.
 The rental agency may be able to charge a fee to deliver and pick up the product(s).
17

The rental agency may hold customers financially accountable if damages occur while in
their possession.
 Over time the rental agency can reinvest profits and grow their business. This will provide
more farmers with access to the product(s).
Example: A rental agency purchases ten solar dryers from the manufacturer. Farmers pay daily
rent for the solar dryers to the agency. The rental agency offers its customers incentives so that if
they rent two or more solar dryers at a time, they will receive a discount and have their pick-up
and delivery fees waived. Farmers realize that using a solar dryer to increase the value of their
goods would increase their profit potential and provide greater revenue stability. The word
begins to spread among other farmers, and then the rental agency experiences a higher demand
for their service. The rental agency begins to charge a higher price for renting the solar dryers,
generating more profits for the company. It can reinvest these profits into purchasing more solar
dryers, thus growing the venture and increasing its economic gains. The rental agency also has
the option to allow farmers to use the product at a specific venue where they can dry their foods
for a usage fee. By keeping the products in one location, the agency reduces its transportation
costs and can keep its usage fees lower for the customer.
Product Marketing/Product Scaling: As the rental agency generates its profits from a small
number of products, it can reinvest those profits and continue to scale-up operations. This model
is different from the Informal Group and Co-operative Models in the sense that it works to
expand its customer base, rather than concentrating on a constrained subset of customers. While
the manufacturer maintains a healthy relationship it could continue to sell new or upgraded
products to the rental agency.
Product Characteristics (Mobility): For processing-based value-addition, products that are best
for the Rental Agency Model have some similar characteristics to those for the Informal Group
Model. The manufacturer should consider the size and mobility of its product when considering
this model. If a product is not mobile, the rental agency could offer a usage fee to each customer.
This would work well for products or services with inconsistent demand, like a laboratory that
provides soil quality testing. Farmers, suspecting soil problems are resulting in decreased yields,
would pay to have their soil analyzed using high-tech equipment and trained agricultural
professionals. With more mobile products, offering delivery and pick-up services for a fee would
allow the rental agency to generate additional revenue and further incentivize product use. This
will also provide farmers with limited transportation options the ability to access bulkier
products. Therefore, the manufacturer should consider finding a rental agency with access to a
vehicle. Farming tools that require maintenance could be easily rented, such as a hay baler. Since
hay baling is a periodic form of work, a manufacturer would have much more success in a
market where farmers could rent products for small periods of time every few months.
Product Characteristics (Durability)/Environmental Impact: Since the immediate owner will
not use the equipment, asset protection will be a primary concern. Typical users will not care for
the rental agency’s property as they would care for their own. For this reason the manufacturer
should make sure that any products sold to the rental agency are extremely durable and can be
repaired easily with interchangeable parts made available by the manufacturer. Product durability
is also important in the global context of combating climate change. Products and services need
18
to be made more ecologically efficient to foster a more sustainable world. Ecologically efficient
designs are those that satisfy human needs, reduce ecological impacts, and reduce resource
intensity throughout the life-cycle in line with the Earth’s estimated carrying capacity (WBCSD,
2000). This model allows the manufacturer to sell products that may have high manufacturing
costs but also have short, repetitive use periods and long product lifetimes. This reduces material
intensity and increases material productivity, two key eco-efficiencies defined by the WBCSD.
By following eco-efficient design criteria, the manufacturer will reduce risk, cut costs, improve
reputation, and fuel growth (Corporate Eco-forum and The Nature Conservancy, 2012).
Value-added Market Availability: Similar to the Agricultural Venture model, value-added
marketing can be partially conducted by the rental agency, allowing for quicker inception of the
product. The rental agency has the option to differentiate their payment options. They can
receive cash, processed goods, or both as payment from their customers. Consumers that do not
have the cash can still rent the products for a percentage of their earnings; however, they will
only seek to rent a product if they also have access to these value-added markets. For example, a
manufacturer could provide a new method for cold-storage transportation for flower growers.
Farmers would not be able to afford to purchase transportation themselves, but may lose
bargaining power if they rely on their customers for transport. A separate agency that would
provide cold-storage transportation to markets they identify in return for a percentage of the
shipped flowers could allow farmers better access to markets and larger profit margins.
Supply Chain Resiliency of Goods: This model is also more adaptable to changes in supply
than the previous models, and can handle more seasonal goods, since products don’t need to be
shared amongst stakeholders. If the manufacturer’s product is intended for seasonal produce,
however, it may want to consider products to augment revenues in the off-season. The
manufacturer must also be knowledgeable regarding potential seasonal demand changes of its
product to ensure that the rental agency is properly stocked.
5. Marketing Agency
Figure 7. Marketing Agency Model Diagram
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The manufacturer sells the product(s) to the marketing agency.
The marketing agency and farmers sign a contract.
The marketing agency gives the product(s) to the farmers.
The farmer periodically pays the marketing agency with value-added goods.
The marketing agency becomes a supplier to the market place or other retailer.
Example: A marketing agency purchases 40 solar dryers from the manufacturer. The marketing
agency partners with eight farmers who have the appropriate diversification of crops that it
wishes to sell in the market. It then gives each farmer five solar dryers. The farmers are only
required to meet a specific quota of dried produce and may keep any surplus dried produce. The
marketing agency also forms a partnership with retailers that agree to sell the dried produce. The
marketing agency begins to scale up its operations as it starts to generate profits.
The marketing agency would like to build its brand among consumers and over time scale up
its operations. For the marketing agency to become a reputable supplier, it must obtain a
sustainable supply of produce. One technique would be for the marketing agent to purchase the
manufacturer’s products and give them to farmers. These farmers would agree to fulfill a quota
determined by the marketing agency on a weekly or bi-weekly basis. A binding contract will
outline the duties of both parties for a finite amount of time. It is then to the marketing agency’s
discretion how it should source its products to market, whether through selling directly to the
marketplace or doing business with a retailer or wholesaler.
The manufacturer would choose to work with the marketing agency in order to provide
quality control over the sale of the product, and the marketing agency would profit from selling
the value-added produce without having to invest the time, capital and labor in establishing
manufacturing facilities of its own. Meanwhile, the farmers would directly benefit from the solar
dryers at minimal risks.
Value-added Market Availability: The manufacturer should consider this model if its valueadded goods have a limited market due to severe barriers to entry that only a designated
marketing agency can surpass. If so, a marketing agency might start by finding high-paying
international customers to provide more revenue (particularly if marketed as performing a “social
good”) and help ease global food security challenges. However, the international effort may also
negatively impact regional development and exacerbate local food insecurity (Murray, 2001). To
avoid this, the manufacturer and agency should also further develop the local market, easing food
insecurity and lowering their transportation and distribution costs.
This model may be less attractive than others if the manufacturer is offering products related
to agricultural production. This model would instead be most viable with products related to
value-addition or storage, especially with price-volatile goods. The marketing agency would be
able to optimize profits by sourcing the appropriate goods to markets according to relative price
differences. This can be done by using storage methods to hold goods through short-term periods
of low prices, and selling them when and where it will be more profitable. The capital cost of the
product should be low. The knowledge of the benefits of value-addition should be high, but this
is not as important as it is in previous models because there is an agency with a focus of finding
markets and optimizing profits based on daily pricing. An example of this model would be a
produce waxing machine. Applying a layer of wax extends the shelf-life of produce. A farmer
working with a marketing agency could hold produce during days of low-prices, providing more
20
time to seek markets with the greatest demand. This would also improve the overall resiliency of
the food value chain in that region.
6. Financing Agency
Figure 8. Financing Agency Model Diagram
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
The manufacturer sells the product(s) to the financing agency
The financing agency and the farmer negotiate a contract.
The financing agency gives the product(s) to the farmer.
The farmer pays the financing agency periodically.
Farmers must find their own way to sell goods and generate revenue.
The financing agency assumes the risk of the farmers defaulting.
Example: A financing agency approves six farmers to receive loans for solar dryers. The
farmers agree to the terms of the loans and to make periodic payments back to the financing
agency. They then purchase solar dryers from the manufacturer to dry and increase the value of
their produce. The farmers sell their dried produce in the marketplace and use a portion of the
proceeds to pay the financing agency. As the financing agency receives payments from these
farmers, they are able to finance more loans for other ventures. The farmers have the
responsibility of choosing how they wish to generate revenue from their acquired products.
Access to Capital: An integral aspect of disseminating these technologies to the market is
ensuring the consumers have the capital to invest in these products. Capital is particularly a
problem when a manufacturer is selling a product related to agricultural production. The
manufacturer must ensure that consumers have a means of accessing funds if they lack the
personal resources necessary to purchase a product. Micro-finance and informal-lending
mechanisms are becoming increasingly available for farmers in developing countries as a way to
address this challenge. Larger, international microfinance institutions are socially conscious and
may be interested in partnerships with products that help smallholder farmers. The farmers will
have to repay their loans according to a contractual agreement. Such a partnership would provide
credibility for the manufacturer on a global scale, and may open avenues for relationships with
other large governments or NGOs. For example, a manufacturer could partner with the Grameen
Foundation to provide greenhouses to farmers in Tanzania. The Grameen Foundation is an
experienced micro-lending institution that would be able to find reliable farmers and develop a
21
customer base. After establishing a presence in Tanzania, Grameen could use its extensive
international network to help the manufacturer find farmers in other regions of the world.
Supply Chain Resiliency of Goods: The manufacturer would have most success in partnering
with a financing agency with a strict payback agreement if there is consistent production within
the payback period. Problems may arise in agriculture such as long rainy and dry seasons,
inhibiting consistent production. As a result, this payment period could extend beyond several
crop cycles for seasonal produce, and months could pass with limited or no profits for the
customer. The manufacturer should consider the local estimated ROI of the product and the
produce season length when considering this model. For example, low-cost greenhouses can
typically recoup their costs within two to three crop cycles due to increased yields (Pack &
Mehta, 2012). The ability of greenhouses to extend growing seasons would also contribute to
providing the farmer with more consistent income.
Profits are also susceptible to changing weather conditions, government regulations, and
other factors that cause volatile revenue streams. Coconuts, for example, can be grown yearround in coastal areas. A coconut milk processing center could reap consistent, monthly profits
that would allow for reliable payment to the Financing Agency.
7. Educational/Vocational Institution
Figure 9. Education/Vocational Institution Model Diagram
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
The manufacturer sells the product(s) to the vocational school.
The vocational school offers classes to farmers that will teach them how to use, maintain,
and make a profit using the product.
 The vocational school can continue to update its curriculum as new technologies arise to
attract former students and recruit new students to the school (Basant & Chandra, 2007).
Example: A vocational school purchases ten solar dryers and hires one instructor to teach a
course on their use, maintenance, and optimization. The school holds three classes each week,
for which students pay a small fee to attend. These fees are then reinvested into the school so that
it can purchase more solar dryers and accommodate bigger classes. The manufacturer is also
22
given the opportunity to educate the community on the importance and potential of its product
through the support of a well-known local institution. This model facilitates concurrent
technology and knowledge transfer that is beneficial to farmers while the manufacturer benefits
by the farmer’s increased probability of success and the vocational school’s reputation.
Product Marketing/Product Characteristics (Complexity): Customers who purchase
technologies must know how to operate and repair their product. This knowledge transfer is
crucial to the success of the venture. A vocational school can provide classes that teach interested
farmers how to successfully manage their new equipment. This model promotes technology
dissemination through technical education in communities. As community members gain trust in
the technology, self-perpetuating advertisement will ensue, creating more demand for the
manufacturer. This model is unique as it is best suited for products that have very low visibility
in the marketplace. In this case the value-addition can be little-known, the technology can be
new, and training can be complicated. For example, a manufacturer in Kenya that has developed
a low-cost coconut shell briquette maker could partner with a government research institution to
teach farmers about their product. As these briquette makers prove to be profitable, more farmers
will be interested. This will create more demand for the manufacturer. In the case with the
briquette makers, the Educational/Vocational Institution model alleviates the stressors related to
knowledge transfer rather than those related to financing or market stability. In another instance,
a manufacturer may produce innovative water harvesting technologies, such as steel channels. It
could partner with a vocational institution to teach farmers how to properly capture and utilize
runoff using this new product. The manufacturer would use this as an opportunity to expand its
customer base while at the same time disseminating important cost-saving and environmentallyfriendly techniques to farmers. It is important that the manufacturer ensures that the product is
not cost-prohibitive for those being educated on its use at the institution. This model also fosters
entrepreneurship by providing community members with methods of creating their own
livelihoods and connecting with others who share a similar spirit. By creating a space for this
collaboration, the institution contributes to creating a more sustainable community.
Trust and Social Capital: This model strengthens the trust between people and large
educational institutions, which is vital for the development of a vibrant knowledge economy. As
new global learning options become available, such as Massive Open Online Courses (MOOCs),
institutions will be able to more quickly disseminate information. A MOOC is a course, typically
taught by a leading professor at a prestigious college, available free of charge on the internet.
Manufacturers could potentially use this platform to provide further training or updates in
regards to their product using technology available at the institution. Furthermore, strong
connections with educational institutions will provide necessary credibility for the manufacturer.
This credibility is vital for government approval, international funding, and creating a sustainable
business venture. By partnering with an established and well-known institution, the manufacturer
has greater flexibility in early product design and implementation. Many international
development organizations, such as USAID, prefer to work with formalized institutions when
setting up projects. The manufacturer could leverage the partnership to acquire resources that
may meet the goals of these organizations.
Product Characteristics (Popularity): The educational institution allows for less profitable
products to be pursued, since the institution inherently has less of a profit-driven motive.
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Therefore, products that may yield high impacts, but only affect a small portion of the
population, are best developed through an educational institution. For example, fishing villages
that may be dealing with decreasing stocks due to changing climates could be taught innovative
methods for fish farming. This could potentially revitalize villages that rely on fishing alone for
their livelihoods. While the economy of an individual village might not greatly impact the
national market, institutions that provide educational opportunities could significantly improve
the livelihood of the farmers engaged in these practices. A critical mass of customers is not
needed for this model to be effective.
8. Distribution Network Centric Model
Figure 10. Distribution Network Centric Model Diagram
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The manufacturer sells products to an entity that already has the necessary infrastructure
for distributing products (a retailer).
The retailer (shop or person) purchases the product from the manufacturer in bulk at a
lower-than-market price.
The retailer takes ownership of product placement and marketing.
This minimizes business functions for the manufacturer.
Example: A manufacturer produces 30 solar dryers a week and contracts with a local department
store. The department store places an order of 120 solar dryers a month for three months to test
the solar dryers in the market. After the first three months, the department store has developed a
deeper understanding of the customer demand for these solar dryers and enters a six-month
contract with manufacturers. While the manufacturer might be compelled to sell the solar dryers
in bulk at a lower cost, the larger volume of the order makes up for the lost per-unit profit.
Product Supply Chain Resiliency: Once the manufacturer’s products have a high enough
demand, distributors and retailers will see value in carrying the product. For start-ups in
developing economies, supply chains are often difficult to implement quickly and inexpensively.
If the manufacturer can capitalize from an already established supply chain, it can quickly reach
potential customers. Also when the manufacturer can sell large amounts of product to one entity,
it can optimize the efficiency and effectiveness of its operations by focusing primarily on
production. At the same time, in order for these entities to do business with the manufacturer the
product must be designed in a way that the distribution network can adequately ship and manage
the product effectively through all in-house logistics. The manufacturer may want to design a
specific “kit” for this reason. Supply chain delays related to weather and road conditions are
24
minimized with this model. Furthermore, product mobility and durability are less important
factors. For example, if the manufacturer is selling a new form of pesticide and a pest outbreak
occurs in a certain region, the product must ship to that region before the customer chooses a
different brand. By utilizing an existing supply chain network, the risk associated with this
problem would be very low.
Product Marketing: This model has the potential for the manufacturer to connect with
particularly isolated customers. This is important in reaching customers that may have the
greatest needs, but can’t reach traditional markets for the product. An existing extremely
powerful distribution model, run by non-profit as well as for-profit entities, involves traveling
salesmen going door to door selling their products. Rural Urban Distribution Initiative (RUDI) in
India is an example of such a distribution network. RUDI provides a means for farmers to
improve their production through warehousing, processing technologies, bulk procurement, and
a well-organized sales distribution network (Cheng, 2012). It is seen as a way to eliminate the
middle man and maximize profits for farmers. RUDI operates through a network of local
distribution centers where farmers can bring their produce for storage or processing. Processed
goods can then be resold to the farmers or brought to market. RUDI-bens are saleswomen who
are involved in every stage of the RUDI supply chain. Some go door-to-door to sell the valueadded goods, reaching markets that would be otherwise difficult to access.
Product Characteristics (Popularity): The manufacturer will find success for this model if
there is already demand for both the value-added goods and the product itself amongst its
customer base. Well known products, like higher-yielding seed types or cooking stoves, would
be more suitable than disruptive technologies. Similar to the Financing Agency model, success is
less dependent on the type of value-addition, and more on the characteristics of the product. This
model does not help stakeholders mitigate capital costs, nor does it provide opportunities for
collective ownership or cost-sharing. Innovation should focus on either price or quality. The
manufacturer must design a product that adds value in a proven, short-term method. The
commissions paid to the retail sales agents directly influence the sales of the product as well.
This model should be considered for high-volume products that require large amounts of
inventory. There may be several competing products in a store, so the manufacturer must find a
way to stand out amongst competition. Brand recognition is also an important factor. Consumers
will typically stick with a brand they trust until given a reason otherwise.
9. Localized Manufacturing Facilities
25
Figure 11. Localized Manufacturing Facilities Model Diagram
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The manufacturer partners with location-specific entities for manufacturing.
The partner companies are typically entities that have the necessary capital and trust to
operate in the specific location.
 The manufacturing facilities sell the product(s) to local entities (i.e. farmers, marketing
agencies, retailers…)
Example: A manufacturer decides that transporting solar dryers is not cost efficient, and it can
sell a greater volume of products at a lower cost by setting up regional manufacturing facilities.
Establishing localized manufacturing facilities allows the manufacturer to utilize locally-sourced
materials. For example, the solar dryers can be built from the most widely-available, inexpensive
and appropriate timber in each region. The manufacturer still retains quality control and branding
over its product, giving it a competitive advantage. At the same time, protection of the
intellectual property (solar dryer designs) is a challenge for the manufacturer.
Trust and Social Capital: In this model, the manufacturer would identify partners to set up
local manufacturing and sales operations. Since the manufacturer would be partnering with
external entities there must be a screening process before the partnerships are formalized. These
manufacturing facilities need to guard their intellectual property to minimize unjust competition.
Communities would be more involved with sourcing the product to market which would create
ownership and trust in the technology, thus bolstering the product’s reputation. The local
manufacturing entity might then sell the product directly to the end-users or to other
intermediaries.
Product Characteristics (Contextual Appropriateness, Mobility): For some products (very
bulky, heavy, hazardous) and business environments (governmental regulation, tariffs,
restrictions on Foreign Direct Investment) this model is more appropriate. This model also
26
addresses regional manufacturing and cultural stressors. This is especially important for products
related to agricultural production, which typically meet needs that relate to local weather
conditions and practices. Certain products may be manufactured differently depending on
contextual factors including road access, proximity to water sources, changes in elevation,
climate, regional cultures, and local market size. A solar dryer would be a good choice for this
model. The solar dryers can be built from local materials and designed differently depending on
temperature and humidity constraints. Since they will be manufactured locally, regional
differences in weather conditions can be incorporated into each design.
Rural-Urban Migration: This model allows for products to be manufactured by those in the
same community as the customer base. Local manufacturing and rural income-generating
activities are encouraged as methods to stem global urbanization. Rural-urban migration has
further stunted rural development and has led to unsanitary conditions as cities become
increasingly overpopulated. This has produced large slum areas with substandard housing,
excessive pollution, and growing crime rates. By providing rural livelihoods, this model can
decrease crime, strengthen family ties, and directly address rural poverty (Epstein, 2001). Similar
to the Financing Agency and Distribution Network Centric Models, the focus of this model is on
the supply chain of the product rather than on incentives for the end-user. Governmental and
international organizations may be particularly interested in this model due to its role of
distributed job creation and stemming of urbanization.
10.Partnership with Franchise
Figure 12. Partnership with Franchise Model Diagram
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The manufacturer franchises the product(s)/service(s) to franchisees.
The partner company must follow particular guidelines to ensure quality control of the
manufacturer’s branded product(s).
The partner company will agree not to carry or service competitors’ products.
Example: The manufacturer offers franchising opportunities to local entrepreneurs, who are
trained by the parent company on all aspects of constructing and selling solar dryers. The
manufacturer receives a royalty on each solar dryer sold by the franchisees. The intellectual
property of the manufacturer is protected, and more importantly, quality control is easier to
maintain than with open-market sales. The customers benefit from the quality and trust that the
brand is able to build over a larger geographical area.
27
Product Marketing: This model would be appropriate if an agricultural company with a large
customer base would benefit from carrying the manufacturer’s products. Both companies, as well
as the consumers, would benefit from this partnership. The manufacturer and franchisee would
have to standardize operations across all locations in order to develop a brand that consumers
trust. A critical challenge would be determining how much to customize (for location) and how
much to standardize (for quality control). Similar to the Localized Manufacturing Facilities
Model, the manufacturer must screen their potential partners to ensure there will be no misuse of
intellectual capital. Accountability methods must be incorporated into any partnership to ensure
that the franchisee is following appropriate procedures and properly conveying the brand.
Product Characteristics (Complexity, Contextual Appropriateness):
For complex
technologies, manufacturers would benefit from partnering with a local franchisee to provide
context-appropriate marketing and training on the product. If the product goes against a longheld practice, even if designed to be harmless and in the end helpful, it is very difficult to achieve
community acceptance. Franchisees could be business leaders and respected members of the
community. They would be most fit to address cultural norms that may be affected by new
technologies. For example, Envirofit International, a company that sells efficient, low-cost, wood
cook stoves, could seek this model as a way to lessen the “fear of the unkown” of their product
and provide a better understanding of how to change certain cooking techniques. The stove may
affect cooking times and temperatures, altering commonly practiced methods regarding food
preparation. A local franchisee would be able to navigate these cultural impacts in a way that the
manufacturer would not be able to. This model empowers entrepreneurs and gives greater
business ownership to locals.
Model Combinations
These models should not be considered in isolation. While the manufacturer would
typically find a lead risk-taker to execute the Level 2 Business Model, it may find greater success
by using certain models in tandem to strengthen its business case. Certain business models lend
themselves to be utilized in conjunction with others as they only address certain stressors when
taken independently. For example, the Educational/Vocational Institution Model mostly helps
with knowledge transfer related to product operation and maintenance. The Distribution Network
Centric Model facilitates product reach in geographically-dispersed and hard-to-reach markets.
The Financing Agency Model helps with access to capital. The Marketing Agency Model
enables market linkages and access to capital. When these models are paired together, multistakeholder business environments can be established to alleviate a broader array of stressors.
Two examples of such models are presented here with the sole purpose of elucidating the hybrid
model concept.
Educational/Vocational Institution & Distribution Network Centric Models
28
Figure 13. Educational/Vocational Institution & Distribution Network Centric Models Diagram
For higher-yield seed products, companies will typically use the Educational/Vocational
Institution Model as a marketing tool, then use widespread distribution networks for access to the
seeds. An example of these models in tandem can be seen in Kenya by local seed companies.
Each year the Kenyan Ministry of Agriculture holds a farm show at their Wambugu Farm facility
in Nyeri, Kenya. They invite several companies to plant their different seed varieties months in
advance, so that those in attendance can see which seeds have the best yield and quality. Farmers
can purchase this seed at the farm show or at their nearest agricultural store, in a method similar
to the Distribution Network Centric model. Since the seeds are readily available, sales are
dependent upon proving to farmers that their product is superior.
Financing Agency/Marketing Agency Models
Figure 14. Financing Agency & Marketing Agency Models Diagram
Another combination that can prove successful is a Financing Agency/Marketing Agency
model. A greenhouse manufacturer can sell a greenhouse to a local farmer through a loan from
an international bank that has agreed to provide the funds with relatively lower interest. The
greenhouse manufacturer also forges a partnership with a marketing agency that exports highvalue products like strawberries to Europe. The farmer can use the greenhouse to grow highvalue crops such as strawberries that will increase his profits and accelerate the payback period.
The farmer would sell the strawberries to the marketing agency without worrying about market
linkages for his products. This setup would allow for all stakeholders to achieve success, as well
as increase the supply of a small but growing strawberry market.
Conclusion
29
The business models in this typology serve as a guide for entrepreneurs working to
establish sustainable, lucrative, and scalable strategies for disseminating agricultural
technologies in developing countries. Manufacturers can choose aspects from any model based
on which stressors they may find most important to address. These stressors are not
comprehensive; the manufacturer must consider all potential impacts of each business model
based specifically on the characteristics of the product and the target market. Additionally, many
of these base-of-the-pyramid ventures benefit from the inclusion and integration of multiple
unconventional partners, such as governments, NGOs, and international educational institutions.
Using these business models as a foundation, further research could explore the potential for
further combining models to create new hybrid strategies for installing, sustaining and scaling up
technologies that can improve the livelihoods of millions of people that collectively form the
global Food Value Chains.
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